L&T bags Hyderabad Metro Rail project

The Andhra Pradesh government on Wednesday decided to award the Rs 12,132 crore (Rs 121.32 billion) Hyderabad Metro Rail Project to Larsen and Toubro Limited.

The state Cabinet, which met here under the chairmanship of Chief Minister K Rosaiah, approved the recommendations of a three-member committee to award the project to L&T that has emerged as the lowest bidder.

L&T sought Rs 1,458 crore (Rs 14.58 billion) as Viability Gap Funding for the project.

The VGF amount would be released by the Government of India while the AP government would spend Rs 1,980 crore (Rs 19.80 billion) towards acquisition of 204 acres of land at two places in Hyderabad as well as relief and rehabilitation of the affected people.

The state government would release Rs 500 crore (Rs 5 billion) as the first instalment in the current financial year, according to Minister for Information J Geeta Reddy.

L&T would form a special purpose vehicle and enter into a concession agreement with the state government within a month of the Letter of Award.

It would have to provide bank guarantee for Rs 360 crore (Rs 3.6 billion) as performance security and achieve financial closure in six months, the Minister said.

Ground works for the project were scheduled to commence in January 2011, she added.

The project would be completed in five years, covering three high-density traffic corridors over a 70-km route.

The traffic demand per day is estimated to be 15 lakh passengers in 2014, which will go up to 22 lakh in 2024.